Performance management system audits

The Audit Act 1995 gives the Auditor-General the power to conduct an audit of performance management systems of any agency or other organisation within the Auditor-General’s remit.

The objective of a performance management system audit includes determining whether the performance management systems enable the entity to assess whether its objectives are being achieved economically, efficiently and effectively.

Performance management system audits can assist accountable officers by identifying opportunities to enhance their ability to effectively monitor and manage the implementation of projects, programs and policies to ensure the intended outcomes are achieved.

The Northern Territory Auditor-General's Office has developed a framework for its approach to the conduct of performance management system audits, which is based on the premise that an effective performance management system would contain the following elements:

• identification of the policy and corporate objectives of the entity
• incorporation of those objectives in the entity's corporate or strategic planning process and allocation of these to programs of the entity
• identification of what successful achievement of those corporate objectives would look like, and recording of these as performance targets
• development of strategies for achievement of the desired performance outcomes
• monitoring of the progress toward that achievement
• evaluation of the effectiveness of the final outcome against the intended objectives, and
• reporting on the outcomes, together with recommendations for subsequent improvement.

Performance management system audits can be conducted at a corporate level, a program level, or at a category of cost level, such as capital expenditure.